Israel Company Law 1999

Part X: Repeal, Transitional Provisions, Application and Commencement

367. (a) The Companies Ordinance is repealed, with the exception of: sections 164 to 201, 244 to 367, 370 to 382 and sections 1 and 394 to the extent that they relate to secured debentures, charges and winding up, both in respect of companies incorporated prior to the commencement of this Law and companies incorporated in accordance with this Law; section 33, which shall continue to remain in force in respect of companies that received an exemption under section 32 prior to the commencement of this Law; section 369, which shall continue to remain in force in respect of companies deleted in accordance with section 368 prior to the commencement of this Law; the provisions and conditions regarding the amendment of the memorandum of association – in respect of a company to which section 24 of this Law applies.

(b) The interpretation of the provisions specified in subsection

(a) shall be effected, wherever possible, in light of the provisions of this Law.

Repeal of Companies Ordinance

368. (a) The provisions of clauses 23 to 29, 51, 58 and 91 in the Second Schedule of the Companies Ordinance shall be deemed to have been included in the articles of association of a company incorporated prior to the commencement of this Law, if such provisions applied to such company immediately prior to the commencement of this Law under the provisions of sections 10 or 11 of the Companies Ordinance in the version that was in force, immediately prior to the commencement of this Law, for so long as the articles of association are not amended under section 20.

(b) The articles of association of a company incorporated prior to the commencement of this Law shall be deemed to include a provision stating that the chairman of the board of directors shall not have a casting vote as provided in section 107, unless otherwise provided in the articles of association, for so long as the articles of association are not amended under section 20.

Transitional provisions regarding application of provisions of standard articles of association

369. (a) The provisions of section 309(b) shall not alter the voting rights by virtue of shares purchased by a subsidiary in its parent company or purchased by any other corporation controlled by the parent company prior to the commencement of this Law, to the extent that such voting rights are granted under any law.

(b) Where shares have been purchased as provided in subsection (a) and following the commencement of this Law, a subsidiary or other corporation controlled by the parent company purchases additional shares of the same class and thereafter part of such shares are sold, for the purposes of voting rights by virtue of the remaining shares, it shall be considered as if the shares purchased after the commencement of this Law were sold first.

Transitional provisions regarding sharesof the company if owned by subsidiary

370. A company that, immediately prior to the commencement of this Law was a company limited by guarantee, as defined in the Companies Ordinance, in the version that was in force immediately prior to the commencement of this Law, and did not have share capital, the provisions of this Law shall apply to it and its members shall be considered shareholders of a company having share capital with no nominal value.

Application to company limited by guarantee

371. The person acting as internal auditor of a public company immediately prior to the commencement of this Law pursuant to an approval under section 3(b) of the Internal Audit Law, 5752-1992, may continue to act as internal auditor for such company.

Transitional provisions regarding internal auditor

372. A director from the public appointed pursuant to the provisions of section 96B of the Companies Ordinance, in the version that was in force immediately prior to the commencement of this Law, shall be considered for the purpose of Chapter 1 of Part VI to be an External Director, however, the provisions of the Companies Ordinance, in the version that was in force immediately prior to the commencement of this Law, shall apply in respect of the term of office and renewal thereof.

Director from the public

373. In the Securities Law, 1968: In section 36, the following shall be inserted after subsection (a):

“(a1) the duty to file reports or notices, as provided in subsection (a), to the Registrar, shall not apply to a public company as defined in the Companies Law, 1999.”;

(2) Chapter 9-1 is hereby repealed;

(3) The following shall replace section 56(d):

“(d) the Minister of Finance shall prescribe, in accordance with a proposal by the Authority, in consultation with the Minister of Justice and with the consent of the Finance Committee of the Knesset, regulations regarding:

(1) an offer of purchase of securities in a registered company; the disclosure to be made of the details of an allotment of securities in a registered company offered otherwise than to the public, including the powers of the Authority in respect of such disclosure; the disclosure to be made of the details of an act or transaction of a company requiring approval under sections 275 or 320(c) of the Companies Law, 1999. including powers of the Authority in respect of such disclosure.”

Amendment of Securities Law – No. 18.

374. In the Securities (Amendment No. 11) Law, 5751-199018, section 14, subsection (d) is hereby repealed.

Amendment of Securities (Amendment No. 11) Law – No. 5

375. In the Joint Investment Trust Law, 1994: in section 16:

(a) in subsection (a), in place of “Article B of Chapter 4 of the Companies Ordinance” the words “sections 239 to 249 of the Companies Law, 5759-1999, regarding the appointment of External Directors, mutatis mutandis” shall beinserted;

(b) the following shall be inserted after subsection (a):

“(a1) the External Directors shall be appointed by the manager of the fund after the trustee has examined and confirmed that the conditions of fitness set out in section 240 of the Companies Law, 1999 exist in respect of them; the trustee shall report to the Registrar and to the Securities Authority, and in a closed fund, to the stock exchange as well, as to the results of his examination.”;

(2) In section 41, in place of “Chapter 9-1 of the Securities Law” the words “Article B of Chapter 3 of Part V of the Companies Law, 1999” shall be inserted.

Amendment of Joint Trust Investments Law – No. 6.

376. In the National Insurance Law [Consolidated Version], 199520, the following shall be inserted after section 6:

Amendment of National Insurance Law – No. 35.

6A. (a) The Minister, with the approval of the Labor and Welfare Committee, may prescribe by order that insured persons who are members of a corporation or office holders in a corporation, as defined in the order, shall be considered, for the purposes of this Law, as employees or as independent employees or as persons who are neither employees nor independent employees.

(b) An order under subsection (a) shall be made, taking into account, inter alia, the scope of the business of the corporation, the identity of the members and office holders thereof, and their activities in the corporation, and the other circumstances of the case.

(c) The provisions of section 6(b) and (c) shall apply to an order under this section.

(d) In this section:

(1) “members of a corporation” which is a company – shareholders, including a shareholder in a company that has one shareholder;

(2) the terms herein shall be interpreted in accordance with the meanings attributed to them in the Companies Law, 5759-1999, or in accordance with the law applying to such corporation, to the extent that they have no special meaning under this Law.”

“Insured persons who are members or office holders in a corporation

 377. This Law, with the exception of the sections set out below, shall come into force on 25 Shevat 5760 (1 February 2000):

(1) Sections 87 to 89 shall come into force after the publication of regulations for their implementation, on the date prescribed in such regulations;

(2) Sections 143 and 145 shall come into force at the end of three years after the date of promulgation of this Law or on such earlier date as shall be determined by the Minister and the Minister of Finance, provided that regulations have been made under section 144(1); the date on which sections 143 and 145 shall come into force shall be published in advance in Reshumot;

(3) Section 36(a1) of the Securities Law, as worded in section 373 of this Law, shall come into force on the date of entry into force of sections 143 and 145 of this Law, as provided in paragraph (2).

Commencement

 378. This Law shall be published in Reshumot within 45 days from the date it is passed by the Knesset.

Promulgation